Mishkin: Fed Buying Treasuries is A Risky Move

Former Fed governor Frederic Mishkin was on CNBC today saying that the the Fed's Reserve's decision last month to step up its buying of Treasury securities may cause inflation as well as a several other political and economic troubles.

He says that the Fed's decision to use receipts from maturing mortgage-backed securities to buy more Treasuries is one of the most important decisions the Fed has made in a very long time, and that it comes with several risks.

"When you hold a lot of long-term debt on your balance sheet, you're now exposed to a lot of interest rate risks," "All of a sudden you could be booking losses. Think about the screams in Congress about all of this."

9 minute video: